Judt on inequality
Another terrific piece by Tony Judt in the New York Review of Books. It’s a tough-minded review of Robert Reich’s new book, Supercapitalism. The key quote:
The facts he [Reich] amasses appear to point to an incipient collapse of the core values and institutions of the republic. Congressional bills are written to private advantage; influential contributors determine the policies of presidential candidates; individual citizens and voters have been steadily edged out of the public sphere. In Reich’s many examples it is the modern international corporation, its overpaid executives, and its “value-obsessed” shareholders who seem to incarnate the breakdown of civic values. These firms’ narrowly construed attention to growth, profit, and the short term, the reader might conclude, has obscured and displaced the broader collective goals and common interests that once bound us together. But this is not at all the conclusion Robert Reich would have us reach. In his version of our present dilemmas no one is to blame. “As citizens, we may feel that inequality on this scale cannot possibly be good for a democracy…. But the super-rich are not at fault.” “Have top executives become greedier?” No. “Have corporate boards grown less responsible?” No. “Are investors more docile?” “There’s no evidence to support any of these theories.” Corporations aren’t behaving very socially responsibly, as Reich documents. But that isn’t their job. We shouldn’t expect investors or consumers or companies to serve the common good. They are just seeking the best deal. Economics isn’t about ethics. As the British Prime Minister Harold Mac-millan once observed, “If people want morality, let them get it from their archbishops.” In Reich’s account, there are no “malefactors of great wealth.” Indeed, he contemptuously dismisses any explanation that rests on human choice or will or class interest or even economic ideas. All such explanations, in his words, “collapse in the face of the facts.” The changes recorded in his book apparently just “happened,” in a subjectless illustration of the creative destruction inherent in the capitalist dynamic: Schumpeter-lite, as it were. If anything, Reich is a technological determinist. New “technologies have empowered consumers and investors to get better and better deals.” These deals have “sucked…social values… out of the system…. The story of what transpired has no heroes or villains.”
Judt is our best commentator on contemporary Europe. He’s not religious, as far as I know, and his otherwise superb Postwar is tone deaf on the subject. But it’s striking, isn’t, how closely his analysis of unchecked capitalism straining the common good tracks to Catholic social thought? In that sense he and Benedict XVI seem rather alike.
Hi John: I thought this bit, from the Judt review, was interesting (in light of the last few sentences, about Judt, religion, and the Pope, of your post):
The danger today is that, having devalued public action, we are no longer clear just what does bind us together. The late Bernard Williams, after describing the “objective teleology of human nature” in Greek ethical thought—the belief that there are facts about man’s place in the world which determined that he was meant to lead a cooperative life—concluded that
some version of this belief has been held by most ethical outlooks subsequently; we are perhaps more conscious now of having to do without it than anyone has been since some fifth-century Sophists first doubted it.
In which case who, today, will take responsibility for what Jan Patocka called the “Soul of the City”?
[end quote]
I’m also reminded (and am not *exactly* sure why) of Joel Kotkin’s observation that the City — he’s talking about actual urban centers, I know, and not, as I suppose Judt is, the Polis — to be what it should be, should be “sacred, safe, and busy.” It’s hard to know how to craft policy in order to facilitate the first of these characteristics . . .
Agreed. Nice comment. Judt is British and perhaps the relevant point remains how much Europeans, including Joseph Ratzinger, Jurgen Habermas and Tony Judt share, and how alien some of this language seems in the current American moment.
Thanks, Professor McGreevy, for calling Judt’s piece to our attention.
I had the impression that Reich was a man of the left and something of an idealist. Here, as represented, he seems to be saying “whatever is, is right” or at least “whatever is, is, and questions about what is right are irrelavant”. Have Reich’s views changed over the years or have I had the wrong idea? (My copy of the NYRB has not arrived. I realize that it may answer my questions.)
Reich is not now and never has been a “man of the left.” He’s a Clinton liberal — in other words, the “left” side of corporate capital. If you read his earlier books, you’ll discover that he’s a big fan of “the knowledge class” — i.e., the professional and managerial strata who’ve been instrumental in creating the income inequality that Judt condemns.
Judt’s essay is compelling, but honestly, I don’t see any real desire for “change” among the middle classes, no matter what the enthusiasm for Obamarama seems to indicate. Income inequality is the result of capitalist economic life, but that’s a simple truth that’s it’s become ill-mannered to bring up now, even among Commonweal liberals. When one does, you get the usual chorus: Gulag, Soviet Union, government inefficiency, why should I pay taxes when I work hard, quack quack, blah blah, all hail the marketplace. Reich’s impoverished social and political imagination shouldn’t surprise or disappoint anyone, given the fact that liberals can’t even say the “c”-word when asked to explain why the chasm between the rich and the rest of us is getting so wide.
Rick — I would argue that keeping the city “busy” — i.e., overworked and underpaid for the sake of capital accumulation — is one big reason why no one considers it “sacred.” Or, maybe busy-ness, or business, is now the sacred.
Eugene — You’d agree, though, that the formulation (“sacred, safe, and busy”) does not *have* to mean keeping it “overworked and underpaid for the sake of capital accumulation”? Maybe just “productive enough”?
Rick — I wouldn’t be a genuine man of the Left if I didn’t agree. Though I’d want to clarify that the city should be “productive enough” by the standards of the citizens, democratically chosen. Contrary to the “market populism” so prevalent among our elites (and so well-exemplifed by Reich), the capitalist market is not democratic. First, because those with more dollars have more votes, and second, because democracy is a collective act, not simply a tally of individual choices.
Speaking of Catholic Social Thought, do Catholic CEOs or CFOs have a different mindset from other CEOs and CFOs? Or more generally, does religious affiliation affect the attitude of someone in business toward what we might call “business practice”? Has anyone studied this? How do bishops behave as men of business? I seem to recall that Cardinal Spellman responded to a strike by graveyard workers by having seminarians dig graves.
“Speaking of Catholic Social Thought, do Catholic CEOs or CFOs have a different mindset from other CEOs and CFOs? Or more generally, does religious affiliation affect the attitude of someone in business toward what we might call “business practice”? Has anyone studied this?”
In my admittedly personal experience which is nonetheless probably rather broad, the answer would be no. The reason is that hardly anyone looks at capitalism as a moral order. The “market” instead is looked at as part of the natural order. Catholicism is viewed as a moral order inserted into this natural order. Catholicism’s accommodation to this natural order of capitalism is through the mechanism of “individual moral responsibility.”
The idea that Catholicism and capitalism are different moral orders is so 19th century, isn’t it?
Speaking as one who has served at the very highest levels of the corporate executive ranks and who continues to serve on the boards of multi-billion dollar corporate and other entities, I can tell you that among my peers there is a growing sense of unease regarding the now all to obvious disparity in incomes and wealth in our society. Many believe that this is the result of tax policy which must be addressed as soon as possible. My personal thoughts are that it is now time to restore the kind of steep progressivity to marginal income tax rates that existed prior to the tax reforms of the 1980′s, and while leaving the current capital gains rates intact, extend the holding period for long term capital gains fron one year to seven years.Such an approach would continue to incentivise business formation, draw funds from speculators of all kinds, and in doing so provide resources for much needed social improvements such as extending medicare to all age groups.
Given what I see from my side of the street, I really do not think that significant tax reform, modest income redistribution, and funding for important social needs is an impossibility.
” Or, maybe busy-ness, or business, is now the sacred. ”
With Jacob Marley, we reply, “Mankind was my business!”
I share the view that Judt hits the very core of many contemporary problems.
Could someone be so kind to explain me this part of a sentence in his article: … Schumpeter-lite, as it were.
Predrag